The Australian dollar has risen against the Japanese yen again, as we continue to see this pair head toward the crucial 115 yen level.
AUD/JPY
The Australian dollar has rallied against the Japanese yen during trading on Friday as we continue to see upward movement in this pair. The market is trying to break out to the upside, perhaps clearing the 115 yen level. Breaking above there would allow the market to go much higher.
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Short term, it looks very much like a market that is still trying to sort out what to do next, and despite the fact that there has been bullish pressure recently, you need to keep in mind that we have seen trouble near the 115 yen level a couple of times in the past.
Hawkish Central Banks Drive Yen Weakness
That being said, there is a certain amount of appetite for the Australian dollar as central banks in Australia and New Zealand both are a little bit more hawkish than Japan after all. The Bank of Japan tried to do everything it could to halt the destruction of the yen, but overall, the reality is that the US dollar is just ripping higher against the Japanese yen, and that helps the Japanese yen weaken over the long term against other currencies as well.
If gold gets a little bit of a bid, it could help the Australian dollar rise a bit, and really at this point in time, I think this pair is more or less about the Japanese yen itself, not as much about the Aussie.
Ultimately, it looks as if the Japanese yen is going to continue to get sold into. The interest rate differential certainly helps for buyers to jump in and hold this pair. Ultimately, it would not surprise me at all to see the 115 yen level finally broken, and we could go much higher. In the meantime, short-term pullbacks look like buying opportunities to me.